A central bank is supposed to get the economy and he and his committee clearly don’t.
Don’t get me wrong - what he did was the right thing. A lot of people think it was the right thing.
But he is supposed to land it softly and he crashed it. Having crashed it, he still denied he crashed it until it clearly became so bleeding obvious that he did what he did yesterday.
The cuts that weren't coming until next year are here now. You only do what he did because you overcooked it in the first place.
Brad Olsen of Infometrics was wrong, but he was wrong for the right reasons. He said heads should roll and on that he is spot on.
You don’t run a commentary that says one thing then do another. Their defence will be "things change", but that has always been the Orr weak point. He likes to position himself as some sort of completely removed observer, devoid of any influence in the economy at all.
"Things have come to a grinding halt? How did that happen?"
Last time he talked he saw one thing and told us how it was going to play out. He was wrong.
But to the Olsen point, and indeed my point, was - aren't we supposed to believe him?
When non-tradeable inflation is 5.4%, is that the same as 0-3%? No, it isn't.
When unemployment is 4.6% and not 5.5%, has that metric fallen to where it is supposed to have? No, it hasn’t.
But that doesn’t matter now, apparently.
"Forget everything I said, I've decided to cut." That's how the Governor plays it.
The inescapable truth is he cocked it up. He tried to right it, overcorrected, pretended he didn’t until it was too late, the rhetoric didn’t match the reality, and we got to yesterday.
The result? We'll take it.
The quality of the journey? Bollocks.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
The cuts that weren't coming until next year are here now. You only do what he did because you overcooked it in the first place.
Brad Olsen of Infometrics was wrong, but he was wrong for the right reasons. He said heads should roll and on that he is spot on.
You don’t run a commentary that says one thing then do another. Their defence will be "things change", but that has always been the Orr weak point. He likes to position himself as some sort of completely removed observer, devoid of any influence in the economy at all.
"Things have come to a grinding halt? How did that happen?"
Last time he talked he saw one thing and told us how it was going to play out. He was wrong.
But to the Olsen point, and indeed my point, was - aren't we supposed to believe him?
When non-tradeable inflation is 5.4%, is that the same as 0-3%? No, it isn't.
When unemployment is 4.6% and not 5.5%, has that metric fallen to where it is supposed to have? No, it hasn’t.
But that doesn’t matter now, apparently.
"Forget everything I said, I've decided to cut." That's how the Governor plays it.
The inescapable truth is he cocked it up. He tried to right it, overcorrected, pretended he didn’t until it was too late, the rhetoric didn’t match the reality, and we got to yesterday.
The result? We'll take it.
The quality of the journey? Bollocks.
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
6 comments:
Sure, the lure of low rates sounds good on paper… People can go out and take out a series of loans, credit cards, personal loans, etc. and pile on debt, and “only” have to pay X interest to do it. This mechanism is highly destructive to the middle class. It’s just too easy to get in WAY over your head with easy access to so called “easy money.”
Lower rates fulfil the corporate agenda. With low rates, corporations can borrow to grow their business for next to nothing, while at the same time selling corporate bonds/debt to finance the cost of borrowing. Around the world today, we have historically low rates, meanwhile central banks are planning to lower rates even more moving forward.
Higher rates promote economic growth at home. High borrowing costs allows small businesses to streamline their business model, and not take on oceans of debt which unlike corporations who sell bonds/debt to finance borrowing, must find better ways to grow their business.
Higher borrowing costs also takes away the lure of borrowing for the average person, easy money is not so easy to get, and this further promotes financial responsibility.
For me I cringe still at the $47billion debt that Governor Orr foisted with assistance of Grant Robertson on every NZ family and our grandchildren by the fiscal stimulus at the time of Covid . $47,000,000,000.00 between 6 million residents but only 2.5 million taxpayers.
The man is an economic terrorist and an idiot to boot, as evidenced by our alarmingly weak dollar and collapsing businesses. He and Robertson et al should be prosecuted. They are despicable.
Yep, Orr is probably the worst we've had imo. But, when you look at the fact he's a labour pick, it's not surprising, they have a knack of finding the lowest quality candidate.
Anyone expecting even a hint of competence from an Ardern/Robertson hire is doomed to be disappointed.
If Robertson was able to extend Orr’s tenure, why can’t Luxon fire this incompetent?
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